Thousands could lose network coverage
Dispute between Memorial Healthcare and Florida Blue continues to raise stakes
Tens of thousands of southern Broward County residents insured by Blue Cross Blue Shield of Florida will lose coverage for services at Memorial Healthcare System hospitals — except treatment for COVID-19 — if the two entities fail to agree on a new long-term pricing contract by Sept. 1.
Letters recently sent to Memorial patients and
Florida Blue policyholders warned of the impending loss of in-network coverage. Each entity blamed the other for the impasse in negotiations.
If the contract is not renewed, Florida Blue members would be forced to pay high out-of-network rates for services at Memorial Healthcare hospitals that are currently available at discounted in-network rates.
The change would not affect Florida Blue’s willingness to reimburse Memorial for treating patients hospitalized with COVID-19 illnesses, a spokesman for the insurer said.
Meanwhile, Memorial Healthcare has filed three lawsuits claiming that Florida Blue has denied or underpaid coverage for thousands of procedures in recent years. Memorial seeks more than $35 million in damages.
The dispute has caused confusion and anxiety among longtime Florida Blue members who have long depended on Memorial
Healthcare System.
Abby Goldstein Feilich of Hollywood said getting the letter from Memorial Healthcare was upsetting.
“I had my two kids at Memorial Regional Hospital [in Hollywood]. Both of my parents passed away there. For them to just drop this on us in the middle of this year of all years and give people two weeks notice — how can they do that?”
Florida Blue is the dominant health insurer in the state, with 2.4 million residents enrolled in its HMO,
employer-based and individual market plans, according to the 2019 Health Market Review, a biannual report by independent Minnesota-based analyst Allan Baumgarten. Memorial Healthcare System, with 1,938 hospital beds and $1.8 billion in operating revenue in 2018, is one of Broward’s two largest hospital systems, along with Broward Health, which serves the north half of the county.
All Memorial system hospitals will become “out of network” for Florida Blue policyholders on Sept. 1 if a new contract is not signed, Florida Blue said in letters sent earlier this month to 25,000 members in group plans, individual plans and Medicare Advantage plans. Those include two Memorial hospitals in Pembroke Pines, two in Hollywood, one in Miramar, and Joe DeMaggio Children’s Hospital in Hollywood.
Those hospitals would also disappear from coverage networks of affiliated Blue Cross Blue Shield companies based in other states, which operate in Florida under the same terms that Florida Blue negotiates, Florida Blue’s Kluding said.
Memorial’s letter, sent to 53,000 patients with Florida Blue coverage who accessed Memorial facilities over the past year, told patients that the insurer refuses to pay reasonable market rates for its services.
But Florida Blue’s letter says “high rate increases” demanded by Memorial “would greatly drive up the cost of insurance to our customers and the communities we both serve.”
Failure to reach a resolution would mean that “on or after [Sept. 1], if you continue to use Memorial Healthcare System hospitals, except for emergency and urgent care, you may have to pay the full cost for each visit,” Florida Blue’s letter states.
A patient who comes to a Memorial Healthcare hospital’s emergency department with COVID-19 symptoms on or after Sept. 1 would be treated, Memorial spokeswoman Kerting Baldwin said. “We don’t turn anyone away.”
She added, “If the patient needs [longterm] hospitalization, we will process the admission, unless Florida Blue initiates the transfer to one of their in-network facilities. What will be covered in the admission is truly a benefit question for Florida Blue.”
Paul Kluding, Florida Blue’s senior director of public relations, said, “We would cover COVID-19 treatment [at a Memorial hospital] with no cost share for our members in this scenario.”
Florida Blue’s letter also said that HMO policyholders currently being treated by Memorial for an ongoing condition may qualify for continued coverage for services for six months after the contract termination date under what’s called a “continuity of care” approval.
Jeffrey Bross, Memorial’s senior vice president of managed care, said such continuity of care coverage is required by state law and would cover situations such as “a pregnant lady in her third trimester scheduled to deliver in our hospital” after the contract expires. In another example, Florida Blue’s spokeswoman said continuity of care coverage would also be available for chemotherapy patients receiving treatments deemed necessary by their oncologist.
Doctors visits still covered
Not all Memorial providers would be affected by the potential contract termination. The in-network status will not change for physicians employed by the system’s Memorial Physicians Group, including primary care physicians, specialists and hospital-based providers such as radiologists, pathologists, emergency physicians and anesthesiologists. Memorial’s urgent care centers and satellite surgical centers would also remain in Florida Blue’s network.
However, even if physician visits are covered, any procedures that the physician would normally schedule at one of Memorial’s hospitals would not be covered, Bross acknowledged. In such situations, policyholders would be required to find another physician to perform the procedure at a hospital within Florida Blue’s provider network.
That’s what bothers Keith Cohen, a Pembroke Pines resident and Florida Blue policyholder, about the potential loss of in-network status of the Memorial hospitals.
After receiving the letters from Memorial and Florida Blue, Cohen said he made sure to schedule an upcoming surgical procedure before potentially losing coverage on Sept. 1.
“My doctor is independent and part of Florida Blue’s network but has staff privileges at Memorial Health System hospitals,” he said. If the contract is not extended, “you’ll be able to see your doctors in-network, but the problem is getting any procedure done. I would have to find a new doctor for a colonoscopy. It would be a real mess.”
Failure of the two health giants to come to terms would create a hardship for tens of thousands of southern Broward County patients, Cohen noted.
“If you live in the Pembroke
Pines-Hollywood area, Memorial is the only health system,” he said. “All of my doctors are in the Memorial group.”
Florida Blue’s letter includes a list of other hospitals that would remain innetwork for its members. They include Broward Health hospitals in Fort Lauderdale, Coral Springs and Pompano Beach, Holy Cross Hospital in Fort Lauderdale, Cleveland Clinic in Weston, and Tenet Health’s North Shore Medical Center in Fort Lauderdale.
In 2019, a similar dispute left UnitedHealthcare policyholders unable to access Boca Raton Regional Hospital services at in-network rates for more than four months while negotiations dragged on between the two sides.
Memorial seeks ‘fair increases’
Bross said he doesn’t recall Memorial Healthcare ever sending letters to patients blaming an insurer for a potential loss of coverage. He said Memorial resorted to the unusual step in part because “we approached Florida Blue early, in the fall of 2019, and they were not receptive to having any kind of meaningful discussion.”
The dispute centers on prices Florida Blue is willing to pay Memorial Healthcare for services provided in its hospitals, Bross said. “We’ve not gotten fair increases for many years and we’ve been a low-cost provider for many years,” he said.
Memorial is willing to enter a multiyear contract that does not increase prices immediately but rather phases them in over time, he said. Traditionally the hospital system’s contracts with insurers last three years, but Memorial “is open to a longer term if that’s how the negotiation lands.”
Florida Blue, in an email statement, said, “We continue to negotiate with Memorial as we offer a fair, competitive and substantial increase over their current contract terms.”
Bross declined to offer examples of specific pricing disagreements, or how Florida Blue’s reimbursements differ from other insurers. “It puts us in a bad spot to put [specific] numbers out in the public domain,” he said.
Florida Blue says patients would pay much more
Florida Blue’s Kluding declined to provide examples of how much money Memorial Healthcare typically seeks compared to other hospitals for a heart transplant operation. He said Memorial is looking for “double digit increases” in the next contract.
“If we would agree to Memorial’s contract, under our most popular health plan [myBlue] ... several typical health care procedures would cost [policyholders] thousands more in out-of-pocket costs, such as the birth of a child, MRIs and appendectomies,” he said.
In late June, Memorial filed three lawsuits against Florida Blue, claiming it has failed to pay, underpaid, or delayed payments for thousands of covered services over the past five years. The suits, which seek more than $35 million, accuse Florida Blue of conducting illegal pre-payment audits and requesting unnecessary records and claims information.
Bross said he couldn’t immediately say how many patients received bills for services they were told beforehand would be covered by Florida Blue.
Bross said the lawsuits were not filed as part of Memorial’s negotiating strategy over terms of a new contract, adding, “We probably would have sued them anyway.” Still, he said, if Memorial and Florida Blue agree to settle the claims as part of a possible long-term contract agreement, “it wouldn’t be the first time in history that contract decisions bled into lawsuit decisions.”